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Minutes - Investment - 2007-09-13"r �J �R COSTA MESA SANITARY DISTRICT MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING September 13, 2007 CALL TO ORDER The meeting was called to order at 5:30 p.m. by Treasurer /Finance Director Marc Davis ROLL CALL Committee Members Present: Director Arlene Schafer (rotating committee member) Director Arthur Perry (rotating committee member) Mr. Rob Hamers, Manager /District Engineer Staff Members Present: Mr. Marc Davis, Treasurer /Finance Director Mr. Thomas Fauth, Assistant Manager Ms. Joan Revak, Board Secretary /Program Manager /Clerk of the District Ms. Sherry Kallab, Accountant NEW BUSINESS Review of Treasurer's Report Mr. Davis reported that the District's portfolio is earning approximately 4.20/0 as of August 31, 2007. The average maturity of the portfolio investments is approximately 6 months. The District has approximately $10,200,000 invested. The District plan has been to hold the current securities until they mature. The next security will be maturing at the end of September in the amount of $500,000, and that will not be reinvested, but will be placed into LAIF. The reasoning behind putting the proceeds into LAIF is to provide liquidity in the event the District needs the funds to make expenditures for the District Yard. Mr. Davis explained that the District's portfolio is a fixed income portfolio and reacts opposite of the interest rate. If interest rates increase, the market value of our portfolio decreases, and if interest rates decrease, the market value of our portfolio increases. Mr. Davis stated that the Federal Reserve may drop interest rates at their next meeting and if they do so, the market value of the District's portfolio will be higher. Several securities will be maturing in 2008 and this will be the point in time the District will start reinvesting and start to restructure the portfolio so that investments will mature when we have our cash flow shortage, such as in the months of May through November. Director Perry inquired about the amount of District funds currently being held in LAIF and Mr. Davis advised the amount is currently just under $4,000,000. Director Schafer questioned whether LAIF was the best option for the District funds. Mr. Davis discussed that LAIF currently has a slightly higher yield than the Orange County Investment Pool and noted that the Orange County Investment Pool has a longer waiting period for withdrawing funds. MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING September 13, 2007 a Page 2 • • • Director Perry asked how the bank accounts are broken down and Mr. Davis explained that District funds are commingled and invested all together. Director Perry asked what account the funds for the District Yard would be taken from. Mr. Davis replied that the funds for the District Yard will be taken from the Facilities Revolving Fund. Mr. Hamers inquired whether a separate account needed to be set up for the purchase of the District yard. Mr. Davis noted that there is an item on tonight's Board Meeting Agenda for a budget adjustment to set up an account for the purchase of the land for the district yard. There was further discussion regarding the details of the budget adjustment. Update on Annual Audit Mr. Davis reported that the final portion of the District Audit will be taking place the week of October 15th and that the Auditors will be present at the December Board Meeting to answer any questions the Board may have. PUBLIC COMMENTS There were no items discussed under public comments. ADJOURNMENT The meeting adjourned at 5:55 p.m. Approved by: Secretary, Costa M6sa SadiAar:? District Board of : Directors President, Costa Mesa Sanitary stri t Board of Directors